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Calgon Carbon Announces Second Quarter Results

August 5, 2009

PITTSBURGH, Aug. 5 /PRNewswire-FirstCall/ — Calgon Carbon Corporation (NYSE: CCC) announced results for the second quarter ended June 30, 2009.

The company reported net income of $6.1 million for the second quarter of 2009, as compared to net income of $12.7 million for the second quarter of 2008. Net income for the second quarter of 2008 consisted of income from continuing operations of $9.3 million and income from discontinued operations of $3.4 million, which represents the final adjustment to the sale price of the company’s charcoal business that was sold in the first quarter of 2006. On a fully diluted basis, net income per common share for the second quarter of 2009 was $0.11, as compared to $0.24 for the second quarter of 2008, which consisted of $0.18 from continuing operations and $0.06 from discontinued operations.

Income from operations for the second quarter of 2009 was $10.2 million, versus $16.1 million for the comparable period in 2008.

Net sales for the second quarter of 2009 were $103.1 million, a 5.0% decline as compared to record quarterly sales of $108.5 million for the second quarter of 2008. The decline was attributable to the comparably strong U.S. dollar, which resulted in a $6.0-million negative impact on sales from currency translation, and lower demand for certain activated carbon and service products due to the global economic slowdown. Markets that were appreciably affected by the decline in demand included: potable water, environmental water treatment, industrial processes, and food. The sales decline was partially offset by favorable pricing in certain markets.

In the second quarter of 2009, equipment sales increased 5.4% versus the comparable period in 2008 due to higher revenue from ultraviolet systems. Consumer sales were comparable to the second quarter of 2008.

Net sales less the cost of products sold as a percentage of net sales for the second quarter of 2009 was 31.8% versus 34.5% for the second quarter of 2008. The decline was primarily due to a shift in sales mix, as well as increased plant and maintenance costs which were partially offset by favorable pricing for equipment and certain activated carbon and service products.

Selling, administrative and research expenses for the second quarter of 2009 increased 8.6% versus the second quarter of 2008, principally due to higher employee-related costs, primarily pension expense, and an increase in bad debt expense.

Interest expense was $0.1 million for the second quarter of 2009 as compared to $1.6 million for the comparable period of 2008. The change is due to the lower amount of debt outstanding during the second quarter of 2009 as a result of the company redeeming $69.0 million of its 5% Senior Convertible Notes in the second half of 2008.

In the second quarter of 2009, other expense was $1.5 million as compared to $0.5 million for the second quarter of 2008. Financing fees of $0.8 million related to the company’s former credit facility were written-off.

Calgon Carbon’s board of directors did not declare a quarterly dividend.

Net income for the six months ended June 30, 2009 was $12.1 million versus $23.1 million for the comparable period of 2008. Net income for the first half of 2008 included a non-recurring after-tax gain of $5.7 million, or $0.11 per common share from the settlement of a lawsuit and a non-recurring after-tax gain of $3.4 million related to the sale of the company’s charcoal business. Fully diluted net income per common share for the first half of 2009 was $0.21, all from continuing operations. Fully diluted net income per common share for the first half of 2008 was $0.45, which consisted of $0.38 from continuing operations and $0.07 from discontinued operations.

Income from operations for the six months ended June 30, 2009 was $19.1 million as compared to income from operations of $33.7 million for the first half of 2008. This included the $9.3 million non-recurring gain ($5.7 million after tax) mentioned above.

Commenting on the results, John Stanik, Calgon Carbon’s chairman, president and chief executive officer, said, “Revenue was impressive, particularly since there was a significant decline in volume during the quarter. In fact, excluding the negative impact of foreign exchange translation, sales for the second quarter of 2009 slightly exceeded the quarterly sales record achieved in the second quarter of 2008.”

“Since volume was down in the second quarter, we took the opportunity to address needs at our plants that were created by last year’s intense demand for our activated carbon products. The costs associated with these maintenance efforts had a significant negative effect on margins in the second quarter. However, when the work is completed, we will be extremely well positioned to take advantage of increased demand when the economic recovery occurs.”

Calgon Carbon Corporation, headquartered in Pittsburgh, Pennsylvania, is a global leader in services and solutions for making water and air safer and cleaner.

This news release contains historical information and forward-looking statements. Forward-looking statements typically contain words such as “expect,” “believe,” “estimate,” “anticipate,” or similar words indicating that future outcomes are uncertain. Statements looking forward in time, including statements regarding future growth and profitability, price increases, cost savings, broader product lines, enhanced competitive posture and acquisitions, are included in the company’s most recent Annual Report pursuant to the “safe harbor” provision of the Private Securities Litigation Reform Act of 1995. They involve known and unknown risks and uncertainties that may cause the company’s actual results in future periods to be materially different from any future performance suggested herein. Further, the company operates in an industry sector where securities values may be volatile and may be influenced by economic and other factors beyond the company’s control. Some of the factors that could affect future performance of the company are higher energy and raw material costs, costs of imports and related tariffs, labor relations, capital and environmental requirements, changes in foreign currency exchange rates, borrowing restrictions, validity of patents and other intellectual property, and pension costs. In the context of the forward-looking information provided in this news release, please refer to the discussions of risk factors and other information detailed in, as well as the other information contained in the company’s most recent Annual Report.

                             Calgon Carbon Corporation
                    Condensed Consolidated Statement of Income
                   (Dollars in thousands except per share data)
                                    (Unaudited)

                                            Quarter Ended     Six Months Ended
                                              June 30,            June 30,
                                              --------            --------
                                           2009      2008*     2009      2008*
                                           ----      ----      ----      ----

    Net Sales                          $103,090  $108,476  $193,723  $198,807
                                       --------  --------  --------  --------

    Cost of Products Sold                70,319    71,021   131,533   132,786

    Depreciation and Amortization         3,972     4,199     7,748     8,125

    Selling, Administrative & Research   18,626    17,154    35,333    33,445

    Gain from AST Settlement                  -         -         -    (9,250)
                                              -         -         -    ------

                                         92,917    92,374   174,614   165,106
                                         ------    ------   -------   -------

    Income from Operations               10,173    16,102    19,109    33,701

    Interest Expense - Net                 (109)   (1,644)       (3)   (3,299)

    Other Expense - Net                  (1,500)     (480)   (1,928)     (570)
                                         ------      ----    ------      ----

    Income From Continuing
     Operations Before Income
     Tax and Equity in Income
     (Loss) from Equity Investments       8,564    13,978    17,178    29,832

    Income Tax Provision                  2,893     4,555     5,974    10,474
                                          -----     -----     -----    ------

    Income  from Continuing
     Operations Before Equity in
     Income (Loss) from
     Equity Investments                   5,671     9,423    11,204    19,358

    Equity in Income (Loss)
     from Equity Investments                427      (139)      868       299
                                            ---      ----       ---       ---

    Income from Continuing Operations     6,098     9,284    12,072    19,657

    Income from
     Discontinued Operations                  -     3,447         -     3,447
                                              -     -----         -     -----

    Net Income                           $6,098   $12,731   $12,072   $23,104
                                         ======   =======   =======   =======

    Net Income per Common Share
        Basic:
          Income from
           Continuing Operations           $.11      $.23      $.22      $.49
          Income from
           Discontinued Operations           $-      $.09        $-      $.08
                                             --      ----        --      ----
            Total                          $.11      $.32      $.22      $.57

        Diluted:
          Income from
           Continuing Operations           $.11      $.18      $.21      $.38
          Income from
           Discontinued Operations           $-      $.06        $-      $.07
                                             --      ----        --      ----
            Total                          $.11      $.24      $.21      $.45

    Weighted Average Shares
      Outstanding (Thousands)
        Basic                            54,331    40,559    54,225    40,400

        Diluted                          56,285    52,025    56,183    51,891

    * Results have been retrospectively adjusted to incorporate the adoption
      of FASB Staff Position APB 14-1, "Accounting for Convertible Debt
      Instruments That May Be Settled in Cash upon Conversion (Including
      Partial Cash Settlement)" .

                  Calgon Carbon Corporation

    Segment Data:
    -------------

    Segment Sales                        2Q09      2Q08   YTD 2009  YTD 2008
    -------------                        ----      ----   --------  --------

    Activated Carbon and Service         89,383    95,284  167,146   172,182
    Equipment                            11,327    10,742   22,226    20,439
    Consumer                              2,380     2,450    4,351     6,186
                                          -----     -----    -----     -----

    Total Sales (thousands)            $103,090  $108,476 $193,723  $198,807

    Segment
    Operating Income (loss)*             2Q09      2Q08   YTD 2009  YTD 2008
    ------------------------             ----      ----   --------  --------

    Activated Carbon and Service         13,200    19,766   25,082    37,142
    Equipment                               962       519    1,937     3,962
    Consumer                                (17)       16     (162)      722
                                            ---        --     ----       ---

    Income from Operations (thousands)  $14,145   $20,301  $26,857   $41,826

    *Before depreciation and amortization.  The YTD 2008 period includes the
     $9.3 million gain on AST settlement ($5.3 million Activated Carbon and
     Service and $4.0 million Equipment).

                           Calgon Carbon Corporation
                     Condensed Consolidated Balance Sheet
                            (Dollars in thousands)
                                  (Unaudited)

                                                  June 30,  December 31,
                                                   2009          2008*
                                                   ----          ----

                        ASSETS

    Current assets:

      Cash and cash equivalents                    $7,501       $16,750

      Restricted cash                              11,019             -

      Receivables                                  65,548        64,515

      Inventories                                  94,441        93,725

      Other current assets                         23,292        25,598
                                                   ------        ------

        Total current assets                      201,801       200,588

    Property, plant and equipment, net            143,774       122,960

    Other assets                                   59,781        63,714
                                                   ------        ------

        Total assets                             $405,356      $387,262
                                                 ========      ========

    LIABILITIES AND SHAREHOLDERS' EQUITY

    Current liabilities:

      Short-term debt                                  $-        $1,605

      Current portion of long-term debt             5,163         7,903

      Other current liabilities                    54,577        56,036
                                                   ------        ------

        Total current liabilities                  59,740        65,544

    Long-term debt                                  7,600             -

    Other liabilities                              69,683        68,441
                                                   ------        ------

        Total liabilities                         137,023       133,985

    Total shareholders' equity                    268,333       253,277
                                                  -------       -------

        Total liabilities and shareholders'
         equity                                  $405,356      $387,262
                                                 ========      ========

    * Results have been retrospectively adjusted to incorporate the
      adoption of FASB Staff Position APB 14-1,  "Accounting for Convertible
      Debt Instruments That May Be Settled in Cash upon Conversion
      (Including Partial Cash Settlement)".

SOURCE Calgon Carbon Corporation


Source: newswire



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